Fixed income | Insight Investment

Investing in credit offers the potential for higher yields than government strategies and lower volatility than riskier asset classes such as high yield or equities.

We are a leading asset manager in corporate bonds with long-established credit expertise. Our active portfolio management process draws on our fundamental credit research and analytical resources.

Our global investment team aims to provide investors with consistent risk-adjusted returns from corporate bonds and invests across a wide range of credit opportunities. With a rigorous and disciplined investment process, the team’s experience and expertise in analysing companies and other issues globally means we can provide capabilities across the full spectrum of the asset class.

Our credit capabilities are available on a pooled or segregated basis for UK, European or global mandates.

Features

• Diversification: Investible universe across the full global spectrum of credit markets, helping to reduce the effects of idiosyncratic credit risks, regional sectoral biases and rising political risks across the globe.
• Broader sources of outperformance: a global approach provides capable managers with more potential sources of relative value across credits, sectors and countries.  
• Top-down and bottom-up approach: our approach draws on Insight’s large team of fixed income specialists. The Fund seeks to maximise value from both a top-down and bottom-up perspective across the full range of global markets.

Pooled fund options

• BNY Mellon Global Credit Fund
• BNY Mellon European Credit Fund
• UK Corporate All Maturities Bond Fund
• UK Corporate Long Maturities Bond Fund

More information on funds Insight manages for BNY Mellon is available here. More information on Insight’s funds is available on our funds and prices page.

We have a long and successful history of managing global government debt and it is one of our longest-running asset classes. Investors looking for attractive risk-adjusted returns from government bond portfolios issued in both developed and developing markets can draw on our investment team’s in-depth experience and global expertise.

We follow a rigorous, disciplined and proven investment process that includes in-depth analysis within a strong risk-controlled framework. The aim is to add consistent value in all market conditions using both conventional and index-linked bonds across the UK, European and global fixed income markets.

Investors can access our government bond capabilities across sterling, euro, US dollar and global markets on a segregated basis.

Features

• Diverse sources of return: our capabilities allow us to add potential value through long or short duration positions, exploit shifts in the yield curve, security selection across the curve and cross-country relative value trades.
• Precision: the portfolio managers can target specific duration and risk characteristics through the use of derivatives, allowing for long and short exposure and precise risk/return profile.
• Capability: we manage government bond portfolios across global markets, allowing us to access the most diverse opportunity set permitted by our mandate and target the widest range of relative value opportunities.

Pooled fund options

• UK Government All Maturities Bond Fund
• UK Government Long Maturities Bond Fund
• Global ex-UK Bond Fund

More information on Insight’s funds is available on our funds and prices page.

Our dynamic market allocation approach looks to exploit opportunities in government and corporate bonds as well as more specialist investments. Our proprietary 'units of risk' model provides us with a consistent way to quantify and scale risk, enabling us to optimise the risk/return ratio in our portfolios.

Our aggregate capabilities can be accessed on a pooled basis (see below), or on a segregated basis for UK, European or global mandates.

Features

• Enhanced yield: aim to outperform the wider bond market through active management focused on stock and sector selection, as well as duration and yield curve management.
• Diversification: aim for consistent risk-adjusted returns by spreading its investments while operating within strict risk-management parameters.
• Effective return-seeking component of an LDI strategy: aims to help generate returns and improve a pension scheme's funding level.

Pooled fund options

• UK Broad Market Bond Fund

More information on Insight’s funds is available on our funds and prices page.

We believe that investing in a short-dated approach to high yield can offer a number of benefits over an all-maturity benchmark-related approach. Credit curves in high yield can be flat as issuers typically receive a single rating regardless of the maturity of the debt. In our experience, this often results in impressive value in short-dated issues. A portfolio can deliver lower interest rate risk, lower volatility and better liquidity.

Investors can access our high yield capabilities on a segregated basis.

Our high yield fund management team aims to provide investors with consistent risk-adjusted returns by investing across a wide range of opportunities. With a rigorous and disciplined process that prioritises credit analysis and pinpointing value, the team's experience and expertise in analysing companies globally means we can provide capabilities across the full spectrum of the asset class.

Features

• Credit analysis: we believe that when investing in high yield, the most important consideration is diligent credit analysis. Our team of specialist credit analysis enforces what we believe is a rigorous, value-based approach.
• Focus on short-dated markets: we focus on short-dated high yield to help take advantage of potential greater certainty of outcome and relatively large premium for short-dated issues.
• Diversification: our expertise spans the full global high yield market helping us as we seek to maximise the benefits of diversification.

Pooled fund options

• BNY Mellon Global Short-Dated High Yield Bond Fund

More information on funds Insight manages for BNY Mellon is available here.

Systematic fixed income

Insight also provides a distinctive, systematic approach to invest in liquidity-challenged fixed income markets, such as high yield, where high transaction costs, poor trading liquidity, and operational complexities present significant challenges to traditional active as well as passive managers.

By combining our proprietary quantitative alpha models with pioneering trading and implementation technology we seek to produce reliable alpha, reduce risk, and provide unprecedented liquidity and scalability to fixed income investors.

Emerging market economies have quickly expanded to a point where they collectively contribute more to global growth than developed economies. The investment opportunity has evolved from a niche asset class to a global opportunity set spanning multiple countries at different stages of the economic and monetary cycle, across a range of sub-asset classes and instruments – including government and corporate debt in local or external currencies, derivatives and foreign exchange markets.

At Insight, we have designed a range of emerging market debt (EMD) capabilities that offer investors structural exposure to emerging markets across the full universe with varying degrees of alpha potential. Investors can access the opportunity set according to their risk/return preferences, exploiting attractive beta and alpha opportunities rather than relying on structural beta alone to drive returns, a feature which is typical of traditional benchmark-driven strategies.

Pooled fund options

• BNY Mellon Emerging Markets Debt Fund
• BNY Mellon Emerging Markets Corporate Debt Fund
• BNY Mellon Emerging Markets Debt Local Currency Fund
• BNY Mellon Emerging Markets Debt Total Return Fund

More information on funds Insight manages for BNY Mellon is available here.

Our buy and maintain bond capabilities are available on a pooled or segregated basis and offer investors a smarter low-turnover approach to access global credit market beta relative to traditional passive approaches.

We invest in diversified portfolios of global issuers with strong credit quality and aim to ensure our portfolios are not over-exposed to the most indebted companies or industries, as can be typical with market capitalisation weighted index approaches. These portfolios are not subject to tracking error and benchmark-weighting constraints, and so can focus instead on targeting the best long-term value and on targeting returns tailored to a clients' specific objectives. Our segregated strategies can be constructed to aim to deliver returns in line with a clients' specific requirements. Our pooled funds can offer constant-duration, long-dated or decaying duration solutions.

Features

• Protection against defaults: the strategies are screened by our portfolio managers and credit analysts for any investments at risk of loss from default or significant deterioration in long-term issuer credit quality.
• Avoid biases of market capitalisation weighted benchmarks: buy and maintain approaches can avoid weighting a portfolio towards the most indebted issuers – an inherent characteristic of market capitalisation weighted benchmarks.
• Continual refreshment of credit views: we use coupon flow and modest turnover to ensure the composition of issuers and sectors reflects Insight's most up-to-date views.
• Performance yardstick: clients can measure the value added over an economic cycle by comparing fund performance versus a customised index constructed using the same buy and maintain ideology.
• Cost efficient: we look to deliver market beta without the transaction costs associated with market weighted index tracking strategies.
• Risk controlled: our benchmark-agnostic approach can avoid the risk associated with sector and issuer concentration typically associated with traditional indexed approaches.

Pooled fund options

• Buy and Maintain Bond Fund
• Long Dated Buy and Maintain Bond Fund
• Short Dated Buy and Maintain Bond Fund
• Maturing Buy and Maintain Bond Funds
• Enhanced Buy and Maintain Bond Fund

More information on Insight’s funds is available on our funds and prices page.

In this video, Clare Bews, Integrated Solutions Credit Portfolio Manager discusses broadening the strategic credit opportunity.

In our experience, secured finance assets such as asset-backed securities can offer greater yield and lower risk than similar quality credit opportunities.

Key benefits

• Yield premium: There is an excess spread available to investors relative to investment-grade corporate credit without having to compromise on credit quality.
• Greater cashflow certainty: At the heart of each investment is a contractual promise to pay, secured by ring-fenced or identified assets which increases the certainty of payment.
• Structural protection: Low loan-to-value ratios, covenants protecting the lender's position and structures with built in excess collateral are some of the ways that secured finance investments can be structured to help protect investors from defaults.

Key capabilities

Our capabilities are available on a segregated basis, and our funds include:

• Secured Finance Fund
• Secured Finance II Fund
• High Grade ABS Fund
• Global ABS Fund
• Liquid ABS Fund

More information on Insight’s funds is available on our funds and prices page.

In this video, Shaheer Guirguis, Head of Secured Finance explains why 2024 could be another favourable year for secured finance.

Our approach to systematic fixed income investing seeks to deliver consistent return outcomes by utilising what we believe is an innovative model-driven approach to unlocking value in inefficient bond market segments. We aim to achieve this within structurally inefficient sectors of the bond market, seeking to deliver greater consistency in long-term returns through enhanced liquidity and broad diversification.

The range of assets available across credit markets, such as high yield debt and asset-backed securities, can make it challenging to apply a consistent responsible approach across these markets, given variances in approaches and available data.

The Responsible Horizons Multi-Sector Credit strategy seeks to generate a total return by investing primarily in a broad range of debt and debt-related securities while taking ESG factors into account.

To find out more about our strategy and to access our capabilities, please contact your Insight representative.

Key features

Access: the strategy targets assets across the full credit spectrum from a well-resourced, highly rated and experienced fixed income team.

Precision: the strategy employs a relative value framework to assess all credit asset classes implemented using Insight’s proprietary Units of Risk budgeting system.

Experience: Insight has extensive track records both within and across credit sub-asset classes through a range of market environments.

For more information on the Responsible Horizons range, visit the page here.

Taxable US municipal bonds can provide non-US investors with greater credit resilience, improve credit quality while maintaining yield and present opportunities for higher risk-adjusted returns.

However, munis remain one of the most overlooked asset class for fixed income investors.

Insight’s highly experienced specialist munis team can help you add resilience to your portfolio via a focus on revenue bonds and help you add value by exploiting opportunities in a fragmented market.

• More information on funds Insight manages for BNY Mellon is available here.

Senior loans can potentially be an efficient source of attractive risk-adjusted returns when investing in fixed income.

We aim to deliver strong risk-adjusted returns by identifying high quality syndicated loans and combining strategic positioning with fundamental credit analysis. Using senior loans can offer greater capital security and less volatility than using traditional fixed income investments.

Features

• Insulation from interest rate risk: The floating-rate nature of the investments can mitigate the impact of future interest rate rises.

• Defensive strategy: By investing in loans, which are usually positioned at a more senior level than bonds, the strategy can benefit from potentially higher levels of collateral protection and stronger covenants, helping to minimise credit risk.

• Diversification: The strategy can invest in a wide range of assets from worldwide issuers.

• Specialist team: Loans are a key alpha generator across fixed income and form an integral part of our flagship strategies. Specialist teams manage Insight’s loan exposures to leveraged loans, property loans, private placements, collateralised loan obligations and distressed debt.

Pooled fund options

• Insight Loan Fund (Ireland domiciled Qualified Investor Alternative Investment Fund)

More information on Insight’s funds is available on our funds and prices page.

For Insight, responsible investment is about value and sustainability. We believe all risks, including environmental, social and governance (ESG) risks, can affect the value of an investment.

Debt markets are larger and reach further than equity markets, offering extensive opportunities to engage with this much wider issuer base.

We believe integrating ESG considerations in our fixed income investment process, including the use of engagement with issuers to better understand material ESG risks that we may identify, can support better investment decision-making and ultimately help our clients to achieve their desired outcomes.

For more information on our approach to responsible investment, please see our responsible investment microsite.

Insight’s Responsible Horizons strategy range aims to help investors achieve two key goals: an investment portfolio that aligns with both future financial targets and sustainability goals. The strategies in the range include:

• Euro Impact Bond
• Emerging Market Debt Impact strategy
• Euro Corporate Bond strategy
• Multi-Sector Credit strategy
• UK Corporate Bond strategy
• Strategic Bond strategy

For more information on the Responsible Horizons range, visit the page here.

Our absolute return bond strategies aim to produce attractive returns in all market conditions by taking a flexible, broad approach to fixed income that harnesses the best opportunities in the market. They are unconstrained and invest in a wide range of fixed income markets including government bonds, investment grade, high-yield, loans, asset-backed securities, emerging markets and currencies.

Features

• Cash-plus goal: not tied to the confines of a traditional fixed income benchmark index, allowing managers more freedom in asset allocation in order to seek out different sources of return.
• Flexible derivatives platform: the strategies’ managers are able to express both positive and negative views, aiming to generate positive performance in all market conditions and hedge unwanted or unrewarded risks where desirable.
• Global diversification: aim for consistent risk-adjusted returns by investing across the full global opportunity set while operating within strict risk-management parameters.
• Effective return-seeking component of an LDI strategy: aim to help generate positive absolute returns while avoiding downside risks in seeking to help improve a pension scheme's funding level.

Pooled fund options

• BNY Mellon Absolute Return Bond Fund
• BNY Mellon Absolute Return Credit Fund
• Bonds Plus Fund

More information on funds Insight manages for BNY Mellon is available here.

More information on Insight’s funds is available on our funds and prices page.

Our absolute return convertible bond strategy seeks to generate attractive risk-adjusted returns that demonstrate low correlation to bond and equity markets and contain volatility, through investment in a focused portfolio of long positions in convertibles paired with dynamic equity hedges.

Key features

Seeking strong risk-adjusted returns: Through combining the defensive characteristics of convertible bonds with robust credit and equity analysis, we believe the strategy has the ability to deliver strong risk-adjusted returns throughout the market cycle.

Opportunity set: A number of different factors have led to convertible bond issuance increasing to levels not seen in over a decade, with significant growth in potential opportunities for active investors.

Highly experienced team: The strategy’s management team has over 20 years’ experience of managing convertible bond strategies including hedge funds and absolute return mandates. In managing the strategy, the team draws upon Insight’s wider investment resources in equity and credit research, quantitative analysis and risk management.

Pooled fund options

• BNY Mellon Absolute Return Global Convertible Fund

More information on funds Insight manages for BNY Mellon is available here.